China turns the screws on U.S. renewable-energy programs

Reuters reports that China's Commerce Ministry said Monday the United States “must cut support for six government-backed renewable energy programs or face unspecified penalties.”

The U.S. measures supporting wind, solar and hydroelectric energy programs in five U.S. states — Ohio, California, Massachusetts, New Jersey and Washington — “present a barrier to Chinese exports,” the ministry said in a statement on its website.

Reuters says the announcement marks the final ruling in an investigation launched in November.

"The Commerce Ministry will adopt relevant legal measures, demands that the United States cancel parts of the measures that violate World Trade Organization rules and give Chinese renewable energy firms fair treatment," the ministry said.

The news service notes that the United States in May “imposed duties of about 31% on solar panel imports from China. It also hit Beijing last month with a second round of duties on wind turbine towers from China.”

Only one way to go

Rising gasoline futures “are paving the way for more pain at the pump.”

So says The Wall Street Journal in this story, which notes gasoline futures “have soared 19% over the past two months, setting in motion an increase in retail prices, which are up 7.2% over the same period,” according to the AAA Fuel Gauge Report.

Pump prices “tend to lag behind moves in the futures market by several weeks, meaning drivers have yet to feel the full extent of the recent rally,” the newspaper says.

Another factor that could lead to higher gasoline prices is that motor fuel “is still playing catch-up with its biggest input cost,” according to The Journal. Crude-oil futures, the paper notes, are up 27% since late June as Western sanctions against producer Iran eroded global supplies.

Zachariah Yurch, head of trading at commodity fund Gamma-Q LLC in Columbus, which manages $52 million in assets, tells The Journal that he's betting prices of gasoline and diesel will continue to rise as supplies fall due to several recent refinery accidents and the closing of refineries in the Northeast.

The U.S. fuel market “already is tight, and it'll continue to remain tight" in coming months, Mr. Yurch says.

The long road ahead

This story from the Zanesville Times Recorder does a good job illustrating the challenge of introducing alternative fuels to the marketplace.

The story notes that Zanesville-based Quasar Energy Group's compressed natural gas sells for the equivalent of $2.25 per gallon. “But even with regular gasoline hovering around $3.75, the pump doesn't get much non-company use,” the paper notes.

“Chesapeake Energy Co. fills about five of its trucks at Quasar, and Sidwell Materials Inc. fills about three, said Mel Kurtz, quasar president, but that's about it,” according to the Times Recorder. And it might be that way for a while.

Natural gas definitely is cheaper than diesel or unleaded, but the cost to convert a vehicle to run on natural gas is about $7,000, a prohibitive cost for many individuals, Mr. Kurtz tells the newspaper.

“Unless you drive a lot of miles, the payback on that is really long,” he says. “Until the price of conversion goes down, that's where we're going to be.”